JOHANNESBURG (miningweekly.com) – TSX- and JSE-listed diamond junior Rockwell had extended its shutdown period to the end of January because of continued diamond-market weakness and was preparing to shed jobs, Rockwell president and CEO John Bristow said on Monday.

Bristow said that the company had elected to extend its shutdown period from the originally announced January 5 to the end of January, following a detailed management review of the prevailing static market conditions, cash flow projections, operational parameters and costs.

Also taken into account were technical factors, including grade characteristics of each mining operation.

The company was restructuring its Middle Orange River operations to reduce costs and increase production efficiencies, Bristow added.

The current plans were to ramp up production at the new Saxendrift plant on the Middle Orange River from February and to suspend operations at the lower-grade Wouterspan operation nearby, until such time as a new high-volume, low-cost, twin-modular pan plant was constructed and commissioned.

A new low-cost, high-volume plant was commissioned at Saxendrift towards the end of 2008.

Bristow said that the proposed suspension of operations at Wouterspan was, "unfortunately", likely to result in the reduction of staff there. To that end, negotiations had been initiated with employees and the National Union of Mineworkers.

The longer-term plan was to upgrade the Wouterspan plant and then to reinitiate mining and processing.

A low-cost degrit and cyclone system had replaced Holpan's desanding unit, and further cost-saving measures were ongoing at the company's other operations, which would restart at the end of January.

"Global economic conditions have brought diamond prices under pressure. In this environment, we continue to take steps to improve operational efficiencies and maintain the competitiveness. This has included the difficult decision to reduce our work force," Bristow said.

In the past 12 months, Rockwell had been forced to adapt to power outages, spiralling costs, industrial action and a hostile takeover attempt.

Despite these challenges, the company had managed to achieve profitability, which set it apart from several of its peers.

Rockwell's financial results for the period ended November 30, 2008 were likely to be published on January 14.

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